Liquidator seizes Thai Royal plane in Munich – UPDATE on US Fed Court procedure
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Liquidator seizes Thai Royal plane in Munich – UPDATE on US Fed Court procedure

UPDATE: See below

As an update to today’s earlier post “Liquidator seizes Royal Thai Air Force plane in Munich”, the BBC:

The Boeing 737 was seized by court order, and will remain grounded, said a spokesman for Munich airport.

Thailand’s Foreign Ministry said the seizure was “highly inappropriate”.

The Thai authorities have expressed to the German government its great concern over the incident and have requested it to resolve the problem as soon as possible,” ministry spokesman Thani Thongphakdi told Reuters news agency.

But Walter Schneider, the administrator for the now-bankrupt construction firm, said the “drastic measure” was “virtually the last resort”.

The Thai government always stalled and did not respond to our demands,” he said.

ThailandRoyalPlane2

A 737 of Royal Thai Air Force stands on the tarmac at Munich's airport Wednesday. Pic: AP.

AP:

Germany’s Foreign Ministry said “we regret the inconveniences for the Crown Prince resulting from the impounding.” The ministry did not elaborate.

Government planes usually have diplomatic status — making them mostly off-limit to the judiciary of foreign countries — but that only holds when they are traveling on official purpose, not private trips.

“The search for the plane was very complicated and of course had to be carried out in a discreet manner to avoid giving any warnings,” the administrator, Werner Schneider, said in a statement.


The Crown Prince’s plane stood idle on the airport grounds Wednesday, with photos showing the court order “against the Kingdom of Thailand represented by the Prime Minister Abhisit Vejjajiva” affixed to the plane’s door, forbidding “any change, use or reduction of the (plane’s) value.”

Reuters has more from Thani:

Thai Foreign Ministry spokesman Thani Thongpakdi said Bangkok had relayed its concern to the German government over the incident and asked it to step in to rectify Walter Bau’s “highly inappropriate action”.

We have learned with great concern that the German company has impounded the plane that is a personal asset of His Majesty Crown Prince Vajiralongkorn, using it as collateral in trying to enforce a still pending court decision,” he said.

Thani said Walter Bau’s case against the Thai government had not reached its final conclusion as its lawyers were still in the process of appealing in a court in New York.

BP: On Thani saying that Thailand was appealing in New York, BP went googling and found out that Walter Bau (“WB”) decided to take the matter to the United States District Court for the Southern District of New York to seek confirmation of the arbitration award and to enforce it (ie get their money). A judge ruled in WB’s favor on March 14, 2011(PDF):

On July 1, 2009, the Arbitrators issued the final Award, assessing damages Thailand in the amont of 29.21 million euros, plus costs in the amount of 1,806,560 euros, plus interest (“the Award”). On March 26, 2010, WB filed its Petition seeking confirmation of the Award. Thailand filed its Cross Petition to dismiss WB’s Petition on August 17, 2010

For the reasons above, the Court GRANTS WB’s Petition to confirm the July I, 2009 arbitration Award in favor of WB and against Thailand and DENIES Thailand’s Cross-Petition. The Clerk is DIRECTED to enter final judgment in favor of Petitioner Werner Schneider, acting in his capacity as insolvency administrator of Walter Bau Ag (In Liquidation), and agains the Kingdom of Thailand and in the amount of : (1)  EURO  29.21 million, plus interest at the six month successive Euribor rate, plus 2% per year, beginning on December 3, 2006 until the date of the award, compounded semi-annually; and (2) EURO 1,806,560, plus interest at the six month successive Euribor rate, plus 2% per year, beginning on July 1, 2009 until the date of payment of the award, compounded semi-annually. The Clerk is DIRECTED to close the docket in this case.

BP: In case you were wondering what the New York connection is? Simple it is easier to enforce judgements in New York and to get assets in relation to an Arbitration Award. The Clerk then, on March 17, 2011, directed (PDF) final judgment in favor of the Petitioner. Thailand appealed to the U.S. Court of Appeals, Second Circuit on April 13, 2011 which scheduled (PDF) a pre-trial argument conference in the above-referenced appeal for Wednesday, June 1, 2011 at 3.30pm.

A few comments or questions:

1. One takes an educated guess – Italaw.com site has all the PDFs of the case and was last updated on July 12 and the last update for this case was about the pre-trial argument – that the Second Circuit has yet to hand down their decision since June 1 so can WB enforce the judgment in the meantime?

(UPDATE: From a long-term reader who has knowledge of federal appeals.

But yes, unless the district court either stayed its judgment pending appeal, or a Second Circuit motions panel granted a stay, the judgment is in full effect. And it doesn’t look like either has happened.  A final judgment in the appeal is a long way off – notice of appeal was only filed in April, so briefs still need to be filed, etc.  It will be at least a year before they get a full hearing before a Second Circuit panel.  In the meantime, it looks like the Clerk’s office is trying to encourage the parties to settle by arranging a mediation conference – which they typically do for complicated cases (it’s worth making the effort to make sure the judges avoid the hard work involved in deciding such cases!).  I can’t see how the parties could settle – in which case there’ll probably be a panel hearing in a year, and a decision may take weeks or months after that.  In the meantime, the government will just have to keep playing games like this if they don’t want to pay.

BP: Hence, yes the liquidator could seize the plane)

2.  From what AP states there is no sovereign immunity as it was a private trip, but then, is the plane seized an asset of the Thai government or private property as Thani of the MFA states? According to the Thai Department of Civil Aviation, “HS-CMV” is a Boeing 737-400 with a CFM56-3C1 engine which was first registered on October 11, 2005. The owner is listed as “H.R.H. THE CROWN PRINCE MAHA VAJIRALONGKORN” (this information can be seen in this spreadsheet in English available from here. Then, again as the RTAF makes clear the aircraft was purchased by the Thai government and it is a royal aircraft (ปัจจุบันกองทัพอากาศมีเครื่องบินพระราชพาหนะในการปฏิบัติภารกิจอยู่เพียงเครื่องเดียว คือ เครื่องบินลำเลียงแบบที่ ๑๑ ข (BOEING 737 – 400) เข้าประจำการมาตั้งแต่ปี ๒๕๓๘ และจะครบกำหนดอายุการใช้งาน ซึ่งกองทัพ อากาศกำหนดไว้สำหรับเครื่องบินพระราชพาหนะคือ ๑๕ ปี ในปี ๒๕๕๓ นี้ – source) and then again with this (กองทัพอากาศ มีภารกิจในการถวายการบินแด่พระบาทสมเด็จพระเจ้าอยู่หัว สมเด็จพระนางเจ้าฯพระบรมราชินีนาถ และพระบรมวงศานุวงศ์ ด้วยการจัดเครื่องบินพระราชพาหนะสำหรับการเดินทางไปประกอบพระราชกรณียกิจในพื้นที่ต่าง ๆ ซึ่งในปัจจุบัน กองทัพอากาศได้บรรจุเครื่องบินลำเลียงแบบ ๑๑ ข (Boeing 737-400) จำนวน ๑ เครื่อง สำหรับเป็นเครื่องบินพระราชพาหนะ เข้าประจำการตั้งแต่ปี ๒๕๓๙ และจะครบกำหนดอายุการใช้งาน ซึ่งกำหนดไว้ ๑๕ ปี ในปี ๒๕๕๓ กองทัพอากาศจึงได้ขอรับการสนับสนุนงบประมาณจากรัฐบาลในการดำเนินการจัดหาเครื่องบินพระราชพาหนะทดแทนก่อนที่เครื่องเก่าจะหมดอายุการใช้งาน และประกอบกับในปี ๒๕๔๙ ซึ่งเป็นปีที่พระบาทสมเด็จพระเจ้าอยู่หัว ทรงครองสิริราชสมบัติครบ ๖๐ ปี กองทัพอากาศจึงได้เร่งดำเนินการจัดซื้อเครื่องบินพระราชพาหนะดังกล่าวให้เร็วขึ้น เพื่อให้สอดคล้องกับห้วงเวลาการจัดงานเฉลิมฉลองดังกล่าว – source).*

3. Will the seizure in Germany be contested about whether government or private property? It could get very messy if it was and as the German liquidator has said, they seized the plane for leverage. Will the Thais settle now to make the problem go away?

*In case you were wondering if they were referring to a different 737-400 aircraft, well as this page from the RTAF makes clear plane “11 Kor” has a CFM56-3 C1 engine which matches the engine listed for HS-CMV

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